CIP on Business Loan

Answered by:

Question:

When we have a loan to a business and it is guaranteed by another business, should we require CIP for each business verses one for both?

Answer:

Your customer is the business that has the loan. You must apply CIP procedures to the first business. Guarantors typically aren't "customers" as they don't open the account [see Section 103.121(a)(3)(i)(A)].

First published on BankersOnline.com 1/9/06